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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22704
Experience:  Taxes, Immigration, Labor Relations
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Hi there. I am a news reporter under an I visa (foreign media

Resolved Question:

Hi there. I am a news reporter under an I visa (foreign media representative).

That visa allows me to work here in the USA for a media news organization abroad (in my case from Argentina).

Since Argentinean government doesn't allow to wire money abroad anymore, I get my salary by credit card.

I opened a merchant account (through a service similar to Square). I know that after receiving more than 20.000 I will receive a K-1099 form.

I think that I should use W8BEN since Im not a resident or US citizen. and I also already paid taxes for that income in my home country.

Should I use a service and close the account before achieving 20K and then start using another one?

Or I can use just one and then reply with a W*BEN instead of the 1099K

If I have to file taxes here would I have to pay for the 100% of the money I received?
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

LEV :

Hi and welcome to Just Answer!
See instructions - last page - http://www.irs.gov/pub/irs-pdf/i1099k.pdf
Exception for de minimis payments. A TPSO is required to report any information concerning third party network transactions of any participating payee only if for the calendar year:
1. The gross amount of total reportable payment transactions exceeds $20,000, and
2. The total number of such transactions exceeds 200.
So far - if the total number of transactions is less than 200 - form 1099K is not issued - and there is nothing to worry.

Customer:

Thank you for your answer. the fact is that I already charge 19.000 and is May, so I need to keep charging the credit card

Customer:

I want to keep using the merchant account to process my payments but I don't think I should pay taxes for a business related to my I visa as a foreign media representative. But some processors only accept 1099K form not W8BEN. So if I receive the 1099K that means that I would have to pay, or I can reply with a W8BEN?

Customer:

?

LEV :

As long as the total number of transactions on your account will be less than 200 - there will not be 1099K form.
Assuming you are receiving wages every week - that will result in 52 transaction - and form 1099K will not be sent to you.

Customer:

Yes but I will have charged more than 20.000 USD by next week

Customer:

So I will do receive that form next year.

LEV :

Only transactions that money are paid to you are counted. Transaction that you pay to others are not counted.

Customer:

I think you didn't understand my question. I am the one getting paid for my services. I already received 19.000

LEV :

There are two items which trigger reporting requirements - (1) total amount AND (2) number of transactions.
I understand that your total amount will be more than $20,000. However will the total number of payments that you receive be more than 200 during the year?

Customer:

Nop, but you receive the form if you get payments for more than 20.000 OR more than 200 transactions, not AND more than 200 transactions.

LEV :

I referenced instructions above.
A TPSO is required to report any information concerning third party network transactions of any participating payee only if for the calendar year:
1. The gross amount of total reportable payment transactions exceeds $20,000, and
2. The total number of such transactions exceeds 200.
Thus if either is not true - no reporting requirements.

Customer:

Ok so what would be the case if I exceed the 20K and the 200 transactions and receive the form?

LEV :

That is correct. The purpose of such reporting to track businesses which are selling goods and have large number of sale transactions - more than 200.
Assuming you are receiving wages every week - that will result in 52 transaction - and form 1099K will not be sent to you.

LEV :

However 1099K is informational return - it help the IRS to track income - but that doesn't mean - that amount is taxable.

Customer:

Ok cool, so then I would be able to send another form like W8BEN stating that I am not a us citizen or resident?

Customer:

Or do you think I would have to double pay taxes

LEV :

The form W8BEN is used if you receive payments from US payer to avoid withholding. Since your payments are coming from a foreign payer - there is no need to use this form - unless you are specifically asked to sign this form.

Customer:

Ah ok, so you think that after receiving that form 1099k I shouldnt receive anything else?

LEV :

I do not think that you will receive 1099K because the number of transactions will be less than 200.

Customer:

And if I do, I have to do something

Customer:

?

LEV :

If you are a resident alien - you need to report all your worldwide income.
If you are a nonresident alien - you are taxed ONLY on income from US sources.
So - you need to determine (1) your residency status and (2) source of your income.

Customer:

1. I am not an alien
2. My source of income is international (from Argentina)

So how would I have to report this to the irs?

LEV :

If you are a nonresident alien and do not have income from US sources - you are not required to file your US tax return and there is nothing for you to report.
If the IRS specifically ask you - you will reply and explain - otherwise - there is nothing for you to report.

Customer:

Great then, thank you very much for the advise. Good night !

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22704
Experience: Taxes, Immigration, Labor Relations
Lev and 6 other Tax Specialists are ready to help you

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